Online trading tool opens new channels

The trading desk at GFInet used to operate via data distribution screens that showed tradable prices but didn't allow customers to conduct online transactions. The infrastructure, implemented in the 1980s, was outdated and had limited capabilities, says CIO Russ Lewis.

GFInet's FX Options project was designed to enable online currency trading via a virtual private network or the Internet.

The options market "traditionally trades over the telephone," says Lewis. The FX Options application enabled GFInet, a subsidiary of brokerage services provider GFI Group Inc., to reach new customers and increase transaction volumes by 20 percent to 30 percent by offering another sales channel. The system was designed to manage simpler trades, freeing brokers to conduct more complex, high-value transactions.

Technology

GFInet now has "a state-of-the-art technology platform" that enables online trading of financial and commodity derivatives, says Lewis. The Java-based system runs on an Oracle Corp. database and uses Los Altos, Calif.-based Talarian Corp.'s SmartSockets for messaging. FX Options is being rolled out to bank trading rooms worldwide and to the firm's internal brokerage desks in New York, London, Tokyo and Sydney.

Business benefits

The FX Options project makes GFInet "more of a one-stop shop" for financial services, says Andrew Koslow, chief operating officer at San Francisco-based brokerage firm The Financial Cafe.com. GFInet is consolidating "different trading technology that you don't typically find among other providers all in one house," says Koslow. What's unique isn't the online currency options capability, but that it's offered along with the company's product suite, he says.

Bottom-line payback

With only a portion of the company's existing client base using the new system, top-line revenue has already increased 20 percent, according to Lewis.

GFInet plans to eventually measure success in terms of market-share growth, profitability and average billing per broker, he adds. GFInet has gained a significant increase in trading volumes by making it easier for customers to trade with the firm, Lewis says. The electronic trading platform has increased customer interest in GFI products and made customers more confident in the company's technology capabilities, he adds.

Lessons learned

GFInet's FX Options project has shown how first-rate technology can enable a company to grow, says Lewis. The company now sees new opportunities to automate other products and expand offerings as a result of the project's success.

At GFInet, no decisions are made until all the brokers, product managers and business analysts come to an agreement, says Lewis. IT was able to overcome brokers' initial hesitation by continuing to solicit their input throughout the design and testing process.

"We stressed that far from disintermediating brokers, the electronic trading platform would enhance their efficiency and free their time for more complex and more profitable trades," he says.

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